Evaluation of Agri-environmental Policies

This chapter provides a conceptual framework for discussing methodological and practical issues arising in the context of evaluating policies for delivering agri-environmental public goods. It distinguishes three stylised types of evaluation – the "administrative", "scientific" and "economic" approaches – each of which provides a different kind of information in a different time-frame. The scope for each approach to perform its role more efficiently and usefully is explored, as well as the underlying difficulties and constraints.

The United States’ agri-environmental (AE) policy for working land relies largely on voluntary programmes. Agri-environmental payments result in additional environmental gains only if they prompt the adoption of practices that would not have been adopted without these payments. Little is known, however, about additionality in US programmes. Recent data from the Agricultural Resources Management Survey (ARMS) show that some producers have adopted conservation practices without payments, either because they are profitable on their farms (conservation tillage) or because targeted practices are required by state regulations (nutrient or manure management). It is also possible that some recipient farmers might adopt practices even without payments. In future research Propensity Score Matching (PSM) will be used to estimate the extent of additionality in US agri-environmental programmes. Potential barriers to this research include small sample size and the complexity of US agrienvironmental programmes.

Flemish rural development policy aims at improving the competitiveness of agriculture while enhancing the environment and the countryside by supporting land management. The quality of life in rural areas is encouraged by diversification of economic activities. The chapter focuses on the evaluation of the environmental effects of two types of rural development measures. First, the environmental effects of farm investment support measures targeting farm modernisation and diversification into non-agricultural activities were assessed. Second, the impacts of agri-environmental measures on farmland bird populations (numbers, species diversity and breeding) were measured based on two separate monitoring initiatives. Results of both evaluations are reported.

This evaluation covers the first four years of the application of cross compliance conditions to all farmer recipients of the Single Farm Payment (SFP) under Pillar 1 of the EU’s Common Agricultural Policy. The main findings are that the compliance level is generally high and that some measures have stimulated significant changes and benefits, although lack of additionality was noted for one measure. The lessons learnt include the need for farmers to be convinced of the rationale for and the public good benefits of certain measures, greater clarity in formulating requirements, more help to farmers with some record-keeping tasks, more care to avoid potential overlaps with Pillar 2 measures, and a separate inspection process, outside the mandatory 1% inspection monitoring fraction, for reported breaches of standards.

Korea’s Environmentally Friendly Direct Payment Programme (EFDPP) provides an incentive and transitional support for farmers who switch to environmentally friendly farming methods. As such, it has made a positive contribution towards preserving the environment in Korea. However, as payments to individual farms cease after three years, it does not provide a permanent on-going reward for the greater provision of agri-environmental public goods once the switch is complete. This chapter reviews the background and objectives of the EFDPP, and its impacts. Since its introduction in 1999, farmers and policy administrators surveyed have evaluated it highly as a programme for promoting environmentally friendly farming. The analysis is then used as a basis for suggesting improvements in the current EFDPP.

Agri-environmental schemes (AESs) that remunerate farmers who volunteer to adopt practices that are more favourable to the environment are increasingly important policy measures in both the United States and the European Union. Cost-benefit evaluation of an AES requires estimates of the additional impact of the AES and of the extent of windfall effects. This chapter defines these notions and discusses the biases of naive ways of estimating them. We then present an overview of the econometric methods that can be used to estimate additional effects. We illustrate them with examples taken from original results on the evaluation of the French AES programme implemented between 2000 and 2006.

The Agri-environmental Footprint Index (AFI) aims to assess the environmental performance of farms under agri-environmental schemes (AESs) by combining existing agri-environmental indicators and multi-criterion decision analysis. A variant of the AFI approach, developed to address AESs in Greece, was applied to two different farming systems under AES regimes (organic farming in extensive olive groves and nitrate pollution reduction in intensive arable crop cultivation), to compare the environmental performance of participating and nonparticipating farms. No significant differences in environmental performance between the two groups of farms were found. Moreover, the AESs in both cases appear to lack full additionality. When AES outcomes are assessed against the environmental objectives pursued, outcomes are in line with the policy aims in the case of organic farming, whereas for the arable farms, any benefits accruing seem to be mainly collateral.

Ontario’s South Nation River watershed has a regulated water quality trading programme. Legally, wastewater dischargers must not discharge any increased loading of phosphorus (P) into receiving waters. New wastewater systems are now choosing trading instead of traditional P removal technology, whereby point source dischargers buy P credits from rural landowners, primarily farmers. These credits are generated by constructing nonpoint source pollution control measures, and science-based formulae are used to calculate the credits of P removed by each measure. The chapter identifies the conditions necessary for the success of such a programme, drawing on ten years’ experience of this established scheme. An independent evaluation showed higher opinions of the programme had enhanced participants’ opinions of the broker and regulatory agency, and most farmers were willing to, or had already, recommended the programme to other farmers.